Category Archives: Immigration

18/8/19: Migration Policy vs the Law of Unintended Consequences


President Trump's policies are a rich field for sowing evidence on the application of the law of unintended consequence in economic policies. Take his Trade War with China that so far resulted in ca USD20 billion in fiscal receipts and USD26 billion payouts in subsidies to U.S. farmers, netting a fiscal loss of USD 6 billion (https://trueeconomics.blogspot.com/2019/06/17619-lose-lose-and-lose-some-more.html), while generating gains for European exporters (https://trueeconomics.blogspot.com/2019/08/15819-winning-trade-wars-round-3.html) and shrinking net real exports for the U.S. economy (https://trueeconomics.blogspot.com/2019/08/1919-losin-spectacularly-trump-trade.html) and driving losses to the U.S. exporters (https://trueeconomics.blogspot.com/2019/07/31719-fed-rate-cut-wont-move-needle-on.html). Another example, the never-ending rhetorical and regulatory war against skilled (and other) migration.

On the latter, we have plenty of evidence drawn from Mr. Trump's predecessors that conclusively shows the costs of severely restrictive application of the skills-based migration quotas. And, thanks to Mayda, A M, F Ortega, G Peri, K Shih, and C Sparber 2017 paper, titled “The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor” (NBER Working Paper No. w23902, https://www.nber.org/papers/w23902.pdf), we now have an in-depth analysis of the mechanics by which unintended consequences of restricting skilled migration impose these economic losses on the U.S.

The authors looked at how changes in H-1B policy, enacted over the years, affect the characteristics of migrants entering the U.S. and how these changes alter U.S.-wide productivity and wages.

Per authors, "The economic intuition [behind the study] is simple. Firms across the globe compete to hire highly skilled workers. The strict quota and the lottery allocation generate uncertainty in acquiring the legal right to work in the US even after securing a job offer. Hence, talented foreign nationals might elect to work elsewhere. Similarly, US firms face uncertainty over whether they will be allowed to employ the top job candidates they have identified. Some firms might elect to forgo this uncertainty altogether by turning to alternative labour sources."

"First, we examine H-1B quality. ... ...H-1B restrictions have particularly hindered the employment of the highest ability foreign-born workers. Anyone who believes immigration policy should be designed to attract ‘the best and brightest’ workers to the country should be troubled by the discovery that restrictions to aggregate inflows generate the opposite effect. Quantitatively, the number of new H-1B workers from the highest wage quintile is nearly 50% lower than it would have been in the absence of H-1B restrictions, but the number of new H-1B workers in the median wage quintile is unchanged." In other words, if wages are a proxy for talent, skills and productivity, reducing H1B quotas appears to reduce availability of more skilled, more talented and more productive foreign workers, while having zero impact on availability of mid-range skills, talents and productivity workers.

Worse, reduced H1B quotas also increased concentration of H1B attaining firms (or reduced the pool of employers with a meaningful access to H1B workers). Authors conclude that "It is possible that when faced with the uncertainty and costs of the H-1B hiring process, economies of scale and network externalities arise that favour firms specialising in H-1B employment and workers with specialised knowledge about the legal hiring process." Or put differently, H1B quotas restriction may be fuelling increase in the share of foreign talent brought into the U.S. by outsourcing agencies and a handful of very larger employers. This selection bias does not appear to be linked to higher productivity and is, therefore, welfare reducing as compared to a system where firms that can generate higher productivity increases by employing foreign workers gain better access to H1B via markets.

In summary, "we presume that by reducing the H-1B cap from 195,000 in 2001-2003 to 85,000 today, policymakers intended to reduce new H-1B employment at for-profit firms and possibly increase employment of competing US-born workers. The policy achieved the first but not the second goal. Moreover, the cap restriction also generated consequences that were likely unintended. The policy change has particularly deterred workers with the highest earnings potential from entering the US labour market. Given the potential for productivity-enhancing technological gains generated by H-1B workers, this loss could reverberate throughout the economy. Other important effects are distributional and favour computer-related occupations and firms that use the H-1B programme heavily."

Consequences. A lesson for MAGA crowd from their predecessors.

14/6/19: The Real U.S. Migration Crisis is Not at the Border, but at Home


I recently wrote about the new data from the U.S. Customs and Border Patrol on crime amongst the illegal and legal immigrants in the U.S. here: https://trueeconomics.blogspot.com/2019/06/3619-what-customs-and-border-protection.html. The key conclusion from this earlier post is that there is no evidence (based on arrests) of a large scale crime wave perpetrated by the legal and illegal aliens in the U.S.

New research from the Pew Research published this week shows that, just as with the migrant crime rates, there is no new migration crisis at the U.S. borders. However, there is a crisis in the U.S. migration, a crisis of different nature.

Take the headline figure:
Number of unauthorised immigrants in the U.S. has fallen 14 percent from the peak in 2007. While the overall numbers remain elevated at close to, but below, 2004 levels, the numbers are not consistent with the claim of a 'crisis on the border'.

However, the real crisis in the U.S. immigration system is the one related to policy and legislation:
Over the years, there has been a steady increase in illegal immigrants with long term U.S. residence. In fact, the increase has been shockingly unchecked. Currently, estimated 66 percent of all illegal aliens in the U.S. have been resident here for more than 10 years. Which exposes the simple fact of life: the U.S. system does not have functional avenues for long term illegal aliens - people who have higher chances of being assimilated into the American society, establishing family roots in the country and forming families in their place of residence - to legalise their status. In fact, Pew Research data shows that the median years of U.S. residence for the unauthorised adult immigrants has risen from 7.2 in 2000 to 15.1 today.

The very purpose of a well-functioning migration system is to encourage and support integration of migrants into the host society. By failing to create a functioning, effective and efficient pathways for illegal migrants with long term tenure in the country to legalise their status, the U.S. immigration system is actively preventing millions of well-integrated residents from securing their future in the place they called home for 15 years or more.

Full Pew Research note is available here: https://www.pewresearch.org/fact-tank/2019/06/12/us-unauthorized-immigrant-population-2017/.

29/12/18: It pains me to no end to see America being reduced to this…


I am not a psychologist or psychiatrist. I am not even a sociologist. So my comments below are based simply on my observations as a human being.

In literature - from Arendt to Kafka, from Levi to Bulgakov, from Platonov to Solzhenitsyn, from Shalamov to Gogol, from Ionesco to Kundera, from Klima to Marquez, from Kinckaid to Coetzee, from Brodsky to Walcott, and so on - a license of power awarded to one by a title or a job, by the state or the sovereign policy, by order or diktat is commonly associated with dehumanization of the awarded. In more common media and popular studies, see https://www.npr.org/2011/03/29/134956180/criminals-see-their-victims-as-less-than-human and https://www.npr.org/2011/03/29/134956180/criminals-see-their-victims-as-less-than-human the notion of a sadistic bureaucrat / soldier / officer / office holder is commonly associated with the license for violence promoted by the State.

With this in mind, in a case of our modern liberal democracies, when such violence / sadism does arise, the dehumanization of its victims and the dehumanization of the officials involved in these acts reinforce each other. Repeated on a rare occasion, such violence and dehuamization of its victims by the officials simply erodes our social trust. Repeated systemically, it risks dehumanizes our entire society, potentially creating systemic racism, xenophobia and debasement of core human values.

With a good part of the last two decades associated with a new - in nature, although not, necessarily in levels - degrees of violence the American society has inflicted onto other states (via numerous regime changes, direct wars, indirect/proxy wars, bombings, drone attacks, etc), and within its own borders on its own people (police violence, police shootings, snooping & spying on its own citizens, mass surveillance, state violence against whistleblowers and so on), the dehumanization of the American society has been growing at a frightening pace. As the result, xenophobia, anti-immigrant sentiments, white supremacism, ant-semitism, Russophobia, political polarization, and other forms of general incivility have been pushed from the extreme fringes of the American society toward its center. The values the Americans still espouse in verbal and propagandistic discourses - those of the freedom of speech, of family, of the land of opportunity, of social mobility, of competition, of private enterprise, and so on - are now coming under the pressure when tested against empirical reality.

And, as of late, we have entered yet another, even more worrying turn of this vicious spiral downward: the dehumanization of our security apparatus. This worries me. A lot. The brutality with which we are treating people, families, kids arriving at our borders with a legitimate claim to an asylum and a legitimate hope (subject to testing) for better lives is contrary to the basic foundations of the American society: its openness to others, its support for the family, its willingness to extend opportunity for betterment of self, its basic humanity.

Last night, this prompted a twitter thread from me that some of you asked me to reproduce in one place. Here it is:

I have travelled to the U.S. for 28 years now. As a Green Card holder, as a Russian and an Irish citizen, as a GC holder again. In ALL my personal interactions with Border Control, I never witnessed any non-professional, non-courteous behavior toward myself or others around. +

+ The accounts from the treatment of asylum seekers, illegal migrants, and the Dreamers are - to me - one of the core pieces evidence of how America’s institutions are changing and have changed over the years from being a melting pot of colures and ethnicities, a land of +


+ opportunity for millions of newcomers, a place where family and children are treasured to a heartless, callous, amoral regime. Here are the facts (via nymag.com/intelligencer/… @NYMag ): +

“A. Portillo, …was taken into custody by CBP in California… her 5-month-old was sick. [Portillo] was giving her baby an antibiotic but said she wasn’t allowed to keep the medication after she was detained. Her baby got sicker as they were held in “freezing” cells — iceboxes — +

+ In a different case, “the seven-year-old Guatemalan girl died of a combination of septic shock, fever, and dehydration, just hours after she was taken into CBP custody.” +
+ Yet “another young girl who fell dangerously ill while in CBP custody. The girl, whose mother told officials her daughter had a preexisting medical condition, went into cardiac arrest but eventually made a full recovery.” +

+ These are not the acts of a civilized law enforcement. These are acts of barbaric power-drunk abusers of the basic principles of humanity. That we endow them with jobs, salaries, pensions, respect & even veneration is beyond the pale for a 21st century ‘liberal democracy’. +

+ These are not even the acts of law enforcement consistent with the principles of the rule of law, for it treats legal asylum seekers - those who have a legal RIGHT to apply for asylum - as sub-human subjects. +

+ If you doubt my judgement on this, here are U.S. Congress legislators on the subject: "New Mexico representative Ben Ray Luján said the holding cells where children and adults are held are “inhumane.” +

+ Texas representative Al Green said what he saw was “unbelievable and unconscionable.” “The [ASPCA] would not allow animals to be treated the way human beings are being treated in this facility,” Green said. “To tolerate what I have seen is unthinkable.”

+ We are empowering this behavior by those representing us at the borders. Just as we are empowering the behavior of police abusers who kill innocent people with zero consequences. We are empowering them by idolizing the brutality of coercion the state licenses out to them. +

+ We are empowering them by voting for the lawmakers who can note - on the record, in the media - the inhumanity of our regime, yet do absolutely NOTHING to stop it. We are empowering them by believing that Putin, Xi, Iran, whoever else you can imagine are causing our problems. +

+ We are empowering them by mistreating migrants, including those who are undocumented, who live and work around us. Before it is too late, before we’ve lost all remnants of civility, decency, honour, compassion, we must stop. Stop ourselves, first.


I am pained by the fact that the American society has grown to tolerate such abuses of power, without demanding better from their lawmakers, their executive, their officers of the State. We are marching toward the inevitable and unenviable collapse of civility as long as we tolerate such abuses to be perpetrated in our names, in the name of the law. 

29/12/18: It pains me to no end to see America being reduced to this…


I am not a psychologist or psychiatrist. I am not even a sociologist. So my comments below are based simply on my observations as a human being.

In literature - from Arendt to Kafka, from Levi to Bulgakov, from Platonov to Solzhenitsyn, from Shalamov to Gogol, from Ionesco to Kundera, from Klima to Marquez, from Kinckaid to Coetzee, from Brodsky to Walcott, and so on - a license of power awarded to one by a title or a job, by the state or the sovereign policy, by order or diktat is commonly associated with dehumanization of the awarded. In more common media and popular studies, see https://www.npr.org/2011/03/29/134956180/criminals-see-their-victims-as-less-than-human and https://www.npr.org/2011/03/29/134956180/criminals-see-their-victims-as-less-than-human the notion of a sadistic bureaucrat / soldier / officer / office holder is commonly associated with the license for violence promoted by the State.

With this in mind, in a case of our modern liberal democracies, when such violence / sadism does arise, the dehumanization of its victims and the dehumanization of the officials involved in these acts reinforce each other. Repeated on a rare occasion, such violence and dehuamization of its victims by the officials simply erodes our social trust. Repeated systemically, it risks dehumanizes our entire society, potentially creating systemic racism, xenophobia and debasement of core human values.

With a good part of the last two decades associated with a new - in nature, although not, necessarily in levels - degrees of violence the American society has inflicted onto other states (via numerous regime changes, direct wars, indirect/proxy wars, bombings, drone attacks, etc), and within its own borders on its own people (police violence, police shootings, snooping & spying on its own citizens, mass surveillance, state violence against whistleblowers and so on), the dehumanization of the American society has been growing at a frightening pace. As the result, xenophobia, anti-immigrant sentiments, white supremacism, ant-semitism, Russophobia, political polarization, and other forms of general incivility have been pushed from the extreme fringes of the American society toward its center. The values the Americans still espouse in verbal and propagandistic discourses - those of the freedom of speech, of family, of the land of opportunity, of social mobility, of competition, of private enterprise, and so on - are now coming under the pressure when tested against empirical reality.

And, as of late, we have entered yet another, even more worrying turn of this vicious spiral downward: the dehumanization of our security apparatus. This worries me. A lot. The brutality with which we are treating people, families, kids arriving at our borders with a legitimate claim to an asylum and a legitimate hope (subject to testing) for better lives is contrary to the basic foundations of the American society: its openness to others, its support for the family, its willingness to extend opportunity for betterment of self, its basic humanity.

Last night, this prompted a twitter thread from me that some of you asked me to reproduce in one place. Here it is:

I have travelled to the U.S. for 28 years now. As a Green Card holder, as a Russian and an Irish citizen, as a GC holder again. In ALL my personal interactions with Border Control, I never witnessed any non-professional, non-courteous behavior toward myself or others around. +

+ The accounts from the treatment of asylum seekers, illegal migrants, and the Dreamers are - to me - one of the core pieces evidence of how America’s institutions are changing and have changed over the years from being a melting pot of colures and ethnicities, a land of +


+ opportunity for millions of newcomers, a place where family and children are treasured to a heartless, callous, amoral regime. Here are the facts (via nymag.com/intelligencer/… @NYMag ): +

“A. Portillo, …was taken into custody by CBP in California… her 5-month-old was sick. [Portillo] was giving her baby an antibiotic but said she wasn’t allowed to keep the medication after she was detained. Her baby got sicker as they were held in “freezing” cells — iceboxes — +

+ In a different case, “the seven-year-old Guatemalan girl died of a combination of septic shock, fever, and dehydration, just hours after she was taken into CBP custody.” +
+ Yet “another young girl who fell dangerously ill while in CBP custody. The girl, whose mother told officials her daughter had a preexisting medical condition, went into cardiac arrest but eventually made a full recovery.” +

+ These are not the acts of a civilized law enforcement. These are acts of barbaric power-drunk abusers of the basic principles of humanity. That we endow them with jobs, salaries, pensions, respect & even veneration is beyond the pale for a 21st century ‘liberal democracy’. +

+ These are not even the acts of law enforcement consistent with the principles of the rule of law, for it treats legal asylum seekers - those who have a legal RIGHT to apply for asylum - as sub-human subjects. +

+ If you doubt my judgement on this, here are U.S. Congress legislators on the subject: "New Mexico representative Ben Ray Luján said the holding cells where children and adults are held are “inhumane.” +

+ Texas representative Al Green said what he saw was “unbelievable and unconscionable.” “The [ASPCA] would not allow animals to be treated the way human beings are being treated in this facility,” Green said. “To tolerate what I have seen is unthinkable.”

+ We are empowering this behavior by those representing us at the borders. Just as we are empowering the behavior of police abusers who kill innocent people with zero consequences. We are empowering them by idolizing the brutality of coercion the state licenses out to them. +

+ We are empowering them by voting for the lawmakers who can note - on the record, in the media - the inhumanity of our regime, yet do absolutely NOTHING to stop it. We are empowering them by believing that Putin, Xi, Iran, whoever else you can imagine are causing our problems. +

+ We are empowering them by mistreating migrants, including those who are undocumented, who live and work around us. Before it is too late, before we’ve lost all remnants of civility, decency, honour, compassion, we must stop. Stop ourselves, first.


I am pained by the fact that the American society has grown to tolerate such abuses of power, without demanding better from their lawmakers, their executive, their officers of the State. We are marching toward the inevitable and unenviable collapse of civility as long as we tolerate such abuses to be perpetrated in our names, in the name of the law. 

Guatemalan deaths met with relative silence by their government

While two young Guatemalans have recently died in US Border Patrol custody, the Guatemalan government has remained mostly quiet. The question is why? Elisabeth Malkin at the New York Times tries to get at the answer in Guatemala Cautious on Young Migrants’ Deaths, Wary of Angering U.S. There's really a two-part answer.

First, the Morales government does not want to further antagonize the United States. In words and deeds, it has successfully lobbied the Trump administration to withdraw its support for the International Commission Against Impunity in Guatemala (CICIG). Day after day, the Morales administration has attacked one of the region's most successful initiatives to battle corruption and impunity. The Guatemalan government recently sought to remove eleven CICIG officials and two of their relatives from the country. The US has remained silent.

Similarly, the Guatemalan government might not want to jeopardize the lives of one million plus of their compatriots in the US. The Guatemalan people and government rely upon the billions of dollars they return to the country in remittances each year.
“We have a de facto apartheid society,” said Anita Isaacs, a Guatemala scholar at Haverford College. “This country continues to be almost as racist as it has been historically.”
The result is that the death of an indigenous child barely registers, she said: “These lives are worth less, and these people are fundamentally invisible.”
Second, the Guatemalan government's weak response to the deaths of two of their citizens in the US is a reflection of the state's discrimination against the country's indigenous people. Anita's quote captures that sentiment. Felipe was from a Chuj-speaking family while Jakelin was from a Q’eqchi’-speaking family.

Whatever the reason, President Trump has not held back against Guatemala in his criticism of the region's leaders. It's unclear how much longer the US government will be able to hold out against the president's Twitter threats.